Episode 419 – More Strikes In China, Ethanol Blend Decisions, GM Creates South America Unit

June 23rd, 2010 at 12:12pm

Runtime 7:28

More autoworkers strike in China. General Motors announced it will create a new regional organization in South America. The U.S. and German governments decide whether or not to increase the blend of ethanol in gasoline. All that and more, plus John answers your questions about Ford and the Honda CR-Z in “You Said It!”

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Transcript and Story Links after the jump . . .

It’s Wednesday, June 23, 2010 and here’s the news.

MORE STRIKES IN CHINA
Uh-oh, here’s something that’s getting to be quite common. The Wall Street Journal reports that Toyota is idling a plant in China (subscription required) due to yet another strike at a Denso factory that makes fuel injectors. Denso already gave its workers a raise in April, but they want more. And Bloomberg reports that Honda had to close two of its plants for the same reason: striking workers at a supplier company that want more money. And here’s where it gets even more interesting. BMW faces a labor dispute at one of its biggest dealership groups in China. Workers at one of those dealerships walked off the job, because, you guessed it, they want more money.

COMPENSATING THE BIG BOYS
Speaking of getting more money, Nissan CEO Carlos Ghosn got $9.5 million in compensation for last year. That compares to the $9 million that GM is paying its chairman, Ed Whitacre; the $6.5 million that Fiat is paying Sergio Marchionne; and the $5.5 million that Daimler paid Dieter Zetsche. Oh, and by the way, Ghosn also gets another $1.6 million in compensation as CEO of Renault.

GM RETURNS TO REGIONAL STRUCTURE
GM announced it will create a new regional organization in South America. Called GM South America, the unit will be run by Jaime Ardila, who is currently the president and general manager of GM Mercosur, and he will report directly to company chairman and CEO Ed Whitacre. The company already has product design and engineering capabilities in South America, which will continue to develop vehicles specifically for that market. I think GM made a mistake creating one unit for its international operations and I believe that the company will go back to its original structure when there were separate operations for its different regions.

GERMANY DOUBLES ETHANOL BLEND
A member of the German government says the country will double the amount of ethanol it puts in gasoline. According to Bloomberg, the amount will be increased from a 5 percent blend to 10 percent by the end of the year. Biofuels only make up 5 percent of Germany’s total transportation fuels. And the use of fuel made from plants has dropped because the government eliminated tax-breaks for consumers.

EPA POSTPONES E-15 DECISION
In related news, the EPA has once again delayed its decision as to whether it will allow the ethanol blend in the U.S. to increase from a 10 percent to 15 percent blend. According to Edmund’s Green Car Advisor, the agency was supposed to make a decision this month but says it won’t have one until at least September. The EPA is waiting on tests being done by the Energy department that want to make sure increasing the blend won’t harm engines built after 2007. But the agency says everything so far “looks good.”

GM USES LASER BRAZING (subscription required)
Fit and finish is a big part of vehicle quality. Buyers don’t want to see misaligned trim or gaping panel gaps on their new $35,000 baby. To help boost the quality of its vehicle-body surfaces, Ward’s reports that General Motors is making more extensive use of a technology called laser brazing. The company is using this advanced welding process on the new Cadillac CTS Coupe. Laser brazing eliminates the “ditch” that forms when two surfaces are joined together. The two-door Caddy uses the process along its roof and across its decklid where a single stamping would not have been possible because of the depth of the draw. This technology also streamlines the painting process. As you’d expect, one obstacle to the more wide-spread use of laser brazing is cost. It’s more expensive than traditional spot-welding.

ELECTRONIC LICENSE PLATES
This story comes to us from Autoblog, courtesy of NBC San Diego. It seems that California lawmakers are desperate to plug the state’s $19 billion budget deficit and are willing to try just about anything. One proposed way to generate more revenue is to introduce digital license plates. Apparently the stamped pieces of metal we’ve been using for more than a century just aren’t good enough anymore. The idea here is that the plates could display a digital message whenever a vehicle is stopped for more than four seconds. In emergencies they could broadcast Amber Alerts or other traffic information. Yep, this is just what we need. If Americans weren’t distracted enough already, we need them reading license plate advertisements when they’re behind the wheel. What will they think on next?

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

First off, I owe an apology to Pedro Fernandez who wrote in last week about Ford building the Fusion in Mexico. I said I had to correct him, that the Fusion was going to be built in Michigan. Wrong. The new Focus will be built in Michigan. The Fusion will be built in Mexico like it has all along.

Another correction. We ran a story from IHS Global Insight saying car sales in Canada were down in the last two months. That prompted Peter Saarniit to write in and say “wrong!” Sure enough, Ward’s sales tally shows that sales in Canada are up for the last three months and are up nearly 7 percent for the year.

EAB wrote in to ask, “Ok, what’s the point of the new Honda CR-Z? Its performance and economy stats are not all that much higher than a straight-up gasser, and the hybrid drivetrain doesn’t provide any more performance. In fact, I would guess if they took weight out of the car that supports all of the gee-whiz stuff as well as the hybrid drivetrain, it probably would perform the same as it does with the toys and hybrid drivetrain.”

EAB, I think you have something there. If you compare the Honda CR-Z to the Honda Fit, which is not a hybrid, you’ll see they have the same power-to-weight ratio of 21 pounds per horsepower. The EPA rates the Fit at 29 MPGs, but says most people will get 32 MPGs. The CR-Z is rated at a combined 33 MPGs with the manual transmission. So, with no hybrid technology and even though it’s a bigger car, the Fit almost matches the CR-Z in fuel economy.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950

22 Comments to “Episode 419 – More Strikes In China, Ethanol Blend Decisions, GM Creates South America Unit”

  1. tj Martin Says:

    John;

    Just to let you know the story you posted last week from edmunds.com on the Mercedes AMG SLS being based on the Viper ( which I’ve been saying since the SLS was first revealed I mean just look at the two cars ) has risen a firestorm in the UK after I so kindly slapped it to the folks over there after months of ridicule from them .

    Lots of disappointed fans and very angry present and future owners of the SLS are having a fit that their so called bespoke AMG SLS is in fact what was supposed to be the new replacement model of the Viper with a M-B body on it .

    So again , thanks for making me look so good .

  2. HtG Says:

    John, if you want to use power to weight ratio to describe performance, then keep in mind that horsepower peaks at high revs. So if Honda’s CRZ uses an electric motor to provide the instant power and torque that you get with electrics, the driving fun quotient goes up even at low revs. I am sure Nick will back me up here.

  3. tj Martin Says:

    NEW DEALER SCAM ALERT ;

    This from a Consumer Advocate friend of mine in Denver CO .

    The newest scam being committed by Auto Dealers Nationwide is to present the paperwork for your ” Loan ” on your new car purchase only in very very fine print it is specifically identified as a Lease !

    A low milage long term lease at that !

    The sad thing is there is nothing illegal about the Dealers placing the Lease Identifying info in very small print and therefore you’ll have no legal recourse once you discover this fact and will in fact be responsible for all the penalties and expenses incurred by the Long Term Low Milage lease you just signed .

    Thinking you’ve just signed the paperwork for your loan .

    So pass the word and beware . My guess is this is only the first of what will be many barely legal scams dealers will be pulling in order to up their profits .

  4. pedro fernandez Says:

    tj: despite car sales being in the dumpster, dealer ripoffs are alive and well, thank you. You would think they would try a little harder to be honest so they can gain customers, but no, let’s screw this guy over so I can get my freaking commission cause by the time he has to replace the car, I won’t be here anymore.

  5. tj Martin Says:

    John ;

    On the Honda CR-Z . Some smart engineering type should get a hold of one , pull out all the extraneous Hybrid mechanicals , and then test the stripped CR-Z head to head against the Hybrid .

    I’ll hazard a guess here and say the results will probably be ;

    1) The Stripped CR-Z will out accelerate the Hybrid
    2) The two cars will either get equal MPG or the stripped one will get better MPG
    3) The stripped CR-Z will be much more entertaining to drive and handle better
    4) Honda will have a fit ( sic ) as will Toyota and all the other Hybrid manufactures as all their claims and hype will fall under the cold hard weight of facts and reality .

    Seriously John . Somebody needs to do this heads up experiment .

  6. G.A.branigan Says:

    Say what they will,15% ethanol will damage a vehicle that does not have the hardware for it.Neither my 08,or 09 are set up for “flexfuel” although that usually pertains to running E85,we have noticed that the 10% blend we have to run has decreased mileage.In fact,last I knew,Oregon was going to get rid of the 10% ethanol blend because it was screwing up too many vehicles.

    I’ve said this many many times before,if you want to run a bio-fuel,make it bio-diesel and encourage the sales of diesel powered cars and light trucks.I have a real hard time understanding why people would rather spend 3k plus on the latest and greatest infotainment systems,but balk at the extra money to buy a diesel option,which in the case of cars and compact trucks,is less then said infotainment system.

  7. HtG Says:

    GAb, I think people will pay for entertainment more than for diesel because essentially they don’t like to drive. The car just goes. If I didn’t like to drive I’d stay off the road any way I could, so dreary and chaotic is the reality here in NY.

  8. Kit Gerhart Says:

    I’d concerned about using E15 in my two 20+ year old cars, and motorcycles. If the E15 is approved, I hope it will still be possible to get E10, or better yet, E0 that is clearly and honestly labeled as such.

  9. Salvador G. Says:

    ELECTRONIC LICENSE PLATES

    … Yeah…eh, WTF.

    First off, How much would it cost to replace lets say just half of all the cars in California with digital elect… Wait, lets go by the list.
    1- I’m assuming this plates are going to directly connected to the cars battery (nevermind how much that work would cost) because independent batteries just won’t work properly.
    2- I also believe the State of California will not charge tax-payers for this plates (replacement or otherwise) since they will entirely pay by the ads themselves before even being install.
    3- I believe this will be voluntary changes and that any damages believe had been cause by this will be cover by insurance and manufacturers…
    ..Then I say is OK- GO for it California.

  10. pedro fernandez Says:

    John: I’m glad we got the Fusion story right, new warning will have to be posted at your local gas pump: “Warning: this E15 gas may cause damage to your vehicle. To avoid this, move to Mexico or Canada”.

  11. G.A.Branigan Says:

    @ HtG:Yeah herman,your right.Instead of the latest and greatest in power-train systems,most would opt for a space age high tech deluxe nav/infotainment system that costs more,and does less in the overall picture.Yeah,they don’t like to drive.That sux so much on many levels.

  12. Kit Gerhart Says:

    What I really don’t understand is people paying $2-3K for OEM nav systems that do the same thing as a $200 Garmin. Make that a $100 Garmin. I bought mine two years ago, and the price has gone down since then.

  13. pedro fernandez Says:

    Kit: around these parts, aftermarket navs get stolen a lot, when installed atop the dash,a built-in unit seems to be harder to steal.

  14. pedro fernandez Says:

    John: In China, are workers permitted to strike only the foreign brands? First Honda now Toyota, is it just coincidence?

  15. Salvador G. Says:

    What I like to ask about the Chinese strike is… How much money is it exactly that these working are asking, I mean is China after all – So from two dollars the hour to what???

    pedro fernandez Says:
    June 23rd, 2010 at 5:13 pm
    John: In China, are workers permitted to strike only the foreign brands? First Honda now Toyota, is it just coincidence?

    Pedro
    - Since the actual union in China is control by the goverment, it maybe something to that; but probably it just finally hit the chinese people that they work too much for too little. I least we should hope – higher wages in China and the U.S might get some of those jobs back…. Or they’ll just move somewhere else for lower wages, maybe Africa.

  16. HyundaiSmoke Says:

    That Focus has a very nice body. Im still not feeling that Grille.

  17. motorman Says:

    the increase in ethanol in gasoline is a plot by the oil companies to sell more gasoline because the MPG will be less so you will need to fill up more often. everyone talks about how many barrels of oil we americans use every day BUT a lot of other products besides gasoline is made from oil and with new cars getting better MPG i wonder how much gasoline they are really selling. if they introduce more ethanol in the gasoline means more sales for the oil companies because you will be getting less MPG needing you to fill up more often

  18. Kit Gerhart Says:

    pedro fernandez Says:
    June 23rd, 2010 at 5:12 pm

    “Kit: around these parts, aftermarket navs get stolen a lot, when installed atop the dash,a built-in unit seems to be harder to steal.”

    I use mine only rarely, like when going to a place in a city I’m not familiar with. If I park in an area that looks even mildly theft prone, I put the nav unit and suction cup thing out of sight in the glove box or console. I’ve heard that leaving the mount stuck to the windshield is an invitation to having your car broken in to, even if the nav unit is not attached, so I put both the nav and the mount out of sight.

  19. David B. Fishburn Says:

    Hey John, The idea about the electronic plates probably won’t happen, as the car has to be modified to make it work. As if we don’t have enough distractions already, like dealer plate frames, bumper stickers, dealer logo stickers, “in memoriam” stickers, cell phones, ipods/mp3 players, navigation units, radios, passengers, pedestrians, other vehicles, the weather, etc. I think the people of Cali. need to tell their “elected officials” to quit playing games and get things straightened out.

  20. Nick Stevens Says:

    # HtG Says:
    June 23rd, 2010 at 12:28 pm

    John, if you want to use power to weight ratio to describe performance, then keep in mind that horsepower peaks at high revs. So if Honda’s CRZ uses an electric motor to provide the instant power and torque that you get with electrics, the driving fun quotient goes up even at low revs. I am sure Nick will back me up here.”

    Yes, good point HtG. But a small Diesel would similarly provide fun at low RPM while getting far better MPG than the complex Hybrid CRZ!

    Also: Kit, Pedro see my replies to yesterday’s show posts and questions of yours.

  21. Ivan Sears Says:

    John, As for Laser Brazing in GM, interesting that it is just now making headlines on Autoline Daily. The current CTS sedan has had laser brazed roof and deck lid since it started production. Further, GM’s Opel Division in Germany had been using laser brazed decklids and liftgates on its Epsilon 1 products dating back to ~ the year 2000. These must be some well kept secrets that they are just coming out now!

  22. LEX Says:

    John,

    I do not see the point of Honda producing the CR-Z! They should have kept the S2000 or Resurrected the RSX from the Acura Division.

    The 2011 Honda Odyssey is a nearly retro through back to the 1999 to 2004 model with a stupid Lighting Bolt Green House Belt Line.
    I can foresee the 2011 Toyota Sienna capturing the Lion Share of the Minivan Market from Honda.
    Especially here in the Northeast where people (like myself) want to down size from an AWD SUV to an AWD Minivan, which Honda does not offer.

    The only Wild Cards in the future battle over Minivan supremacy may include (Fiat / Chrysler), (Hyundai / Kia) and VW. I can see Baby Boomer’s going back to minivans based upon their better fuel ecomony that large SUV’s and easy access. ALL Wheel Drive Minivans with greater ground clearance make more sense than large SUV’s. GM attempted this blending of features with the Chevy Traverse, Saturn Outlook, GMC Acadia and Buick Enclave. Those vehicles are selling quite respectfully, but the new 2011 Toyota Sienna is looking to be the best in class. I just dislike the layout of the dash board and center stack in the 2011 Sienna. Honda should use the design of the dash and center stack in the CR-V for the 2011 Odyssey. It is very functional and pleasant to view.